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Packaging Brief: Highcon Update

As the digital transformation of the packaging industry continues to present new challenges and opportunities for both brand owners and converters, WhatTheyThink Senior Editor checked in with Aviv Ratzman, CEO of Highcon, to see what progress the company has made relative to Euclid, its market entry for laser die cutting and creasing. Read more.

Highcon, a start-up partially funded by Landa Ventures, made a splash with its introduction of Euclid, a laser die cutter/creaser designed for the converting of short-run folding cartons. As we look toward the one-year mark post-drupa, Senior Editor Cary Sherburne spoke with Highcon’s CEO, Aviv Ratzman, to get an update on the company’s progress.

WTT: Aviv, as always, the rumor mill in our industry is active. Let’s start by getting your comments on a couple of Highcon rumors we have been hearing: about the status of patents, and that Euclid has been experiencing some issues relative to its published speed/throughput.

AR: I am happy to say that those are only rumors. With regard to the patents, we have 11 different patent applications at different stages all proceeding on course. As for speed, the published spec for the Highcon Euclid is "up to 1,500 sheets (1060 x 760mm) per hour." We stand by that. The throughput speed is determined by the laser cutting and as such depends on the number of jobs/ups per sheet (accumulated cut line length) paper type, thickness and job layout.

WTT: When I visited you pre-drupa in Israel, I was also able to visit your first beta site, Graphica Bezalel Ltd., a packaging converter located nearby.

AR: The site, which is right next door to our manufacturing facility, is still in beta. They are doing more jobs, and selling jobs. Both his proximity to our facility and his willingness to try a lot of new things has made him a valuable test site for us. We get from him a lot of understanding about how Euclid functions in a true converting environment, and he has helped us to bring the quality to a better level and to validate more applications in more market segments. We see through his eyes the pain points in conventional converting and that helps us to prepare case studies and deepen our understanding of how we can help customers.

WTT: You had announced Staples Europe as a channel partner. Tell us a little more about that.

AR: Staples Printing Systems Europe has a different business model than you are used to in the U.S. For example, they are a distributor for Heidelberg in Belgium, Greece, Italy, Luxembourg, The Netherlands, and Spain. We placed a Euclid in their Plantin demo center in Brussels, and we have been able to bring potential customers in from around the world as an alternative to Israel, depending on customer preference and convenience. They recently held a very successful open house there with 60 attendees, and this resulted in our first two sales in Europe.

WTT: Who are the first two customers and when will their Euclids be installed?

AR: The first, Glossop Cartons, is located in the UK and is 100% folding carton. The other company, Antilope Group in Belgium is 60% commercial print and 40% folding carton. This gives us some good variety for our first two installs. The machines are currently finalizing the integration phase and will be shipped soon.

WTT: Any prospects for U.S. installations any time soon?

AR: Right now we are focusing our efforts on Europe where we have a high level of interest. At the same time, we are scaling up our manufacturing capability and working to reduce the delivery lead time for machines. Our goal is to have machines in inventory that can be shipped right away, and we are making progress toward that goal.

WTT: Do you expect to be exhibiting at any trade shows in the near future?

AR: We have been looking into that, but are having a difficult time determining where we might get the best value for a trade show investment. The truth is, we pretty much know who the prospects are in Europe and North America that are likely to purchase one or more Euclids, and we are not sure that trade show participation is necessary at this juncture. Once we are ready to service Asia, going to one of the Chinese trade shows would likely make more sense for us. We will also focus on setting up regional open houses with focused prospects.

WTT: Do you have any sales presence in North America?

AR: Yes, we do, and they are working through the leads we got from drupa and other sources. We are anticipating equipment availability for North America to be in the August/September timeframe of 2013.

WTT: The maximum sheet size for the Euclid is basically a 42” press sheet. My discussions with folding carton converters have indicated that that sheet size covers 80%+ of folding carton applications. Is that what you are hearing in the marketplace?

AR: Yes. We also find that smaller businesses are more likely to put in a 40” press if they are adding one for folding carton, since it gives them the most flexibility. Larger companies might add a half-size press (29”) to handle smaller format jobs. So there is a lot of activity on the digital as well as offset side of the business that plays into opportunities for the Euclid. Meanwhile, lot sizes are continuing to decline. All the customers we are talking to agree that this is a trend, not something that happened and will disappear. If anything, the trend toward smaller job sizes is accelerating, partly due to the world economic situation, but also because the technology is becoming available to produce these smaller lots more cost-effectively and that gives brand owners an unbelievable amount of flexibility to present their products to the marketplace in the most effective and relevant manner.

WTT: In terms of press manufacturers as either channels or partners, are you primarily focusing on digital?

AR: We want to work with all of the digital press manufacturers that have folding carton capabilities. And there is also significant opportunity with manufacturers of analog presses as they continue to become more efficient and as those manufacturers increase their focus on the folding carton market. In our Brussels open house at the Staples demo center, we converted jobs from Heidelberg offset press sheets. They used Prinect for prepress, imaged the plates, printed the sheets and then handed them off to the Euclid for converting. We were able to demonstrate standard converting—die cutting and creasing—but also some additional capabilities, like adding individual serial numbers to the packages and using different die cuts on the fly, changing creasing and cuts to make a package that can be opened faster, things that cannot be done with an analog converting process at all or not as fast or cost-effectively.

WTT: What about stripping and blanking?

AR: Right now stripping is done manually, although we have integrated stripping in the product development plans. In terms of blanking, there are already plenty of solutions on the market to address that need.